Mr. Marc Geen reports

SPEAKEASY RECEIVES LICENCE FOR ITS 13,300 SQ FT CRAFT CANNABIS FLOWERING FACILITY, TRIPLING ITS PRODUCTION CAPABILITIES

Cannabis Club Ltd. has completed phase 2 of the cannabis complex buildout. The second building adds an additional eight rooms, bringing the total square footage of craft growing space to 36,300 square feet.

Founder Marc Geen stated: "We're thrilled to add an additional 13,300 square feet to our licensed infrastructure, 11,000 square feet of which is growing space. Utilizing buildings within our cannabis campus for a single purpose allows us to use the square footage very efficiently; over 80 per cent of the building is being used to grow crops in this newest facility. Until today, our craft cannabis vertical was running at capacity and we were only able to produce 100 kilograms per month. These additional rooms will allow us to increase our monthly output capacity to 350 kilograms."

The craft cannabis complex

The goal of the cannabis craft complex is to implement the legendary British Columbia bud growing techniques at scale. Utilizing decades of passed-down knowledge, learning experiences and 100-per-cent-climate-controlled small-batch rooms (500 square feet to 1,200 square feet) allows the growers to have absolute control over the entire growing period. Product quality has always been at the forefront of Speakeasy's values and this proven small-batch, craft approach ensures each plant receives the care it requires to maximize unique strain attributes and high-THC (tetrahydrocannabinol) percentage and yield.

The cannabis complex is an engineering success from the Speakeasy team. Not only was it designed with the focus on product quality and yield, but also to maximize the growable space within the structure. This operation gives the company's growers the tools they need to deliver craft cannabis at its highest potential, while offering the company the opportunity to scale through replication of proven models and long-term advantages to bring Speakeasy's IP (intellectual property) into new locations around the world.

Phase 2 scale -- cannabis complex expansion

Speakeasy's cannabis complex phase 1 infrastructure and capacity:

• Six indoor craft grow rooms that are 100 per cent climate controlled;
• 10,000 square feet of indoor craft grow facility;
• 168 grow lights, 14 AC (air conditioning) units;
• Monthly output of 100 kilograms.

Speakeasy's cannabis complex phase 2 infrastructure and capacity:

• 13,300 square feet approved by Health Canada;
• Eight indoor craft grow rooms that are 100 per cent climate controlled;
• Consisting of eight grow rooms outfitted with 405 grow lights, electrical and 36 HVAC (heating, ventilation and air conditioning) units;
• Anticipated monthly output of 350 kilograms.

The success of Speakeasy's first craft cannabis facility exceeded management's expectations. Consistency and high quality were two key factors that were at the top of the priority list, and the Speakeasy team was able to consistently achieve 25 per cent higher THC. Through the demand of craft cannabis from business-to-business sales, the company has proved once again that its foundational beliefs and high product quality at competitive prices will continue to be a winning formula.

Speakeasy will now focus its transition into phase 3 and continue the steps in finalizing the cannabis complex. The additional space and output capacity will allow Speakeasy to add business-to-consumer into the consumer market with its brands as well as allow it to increase its number of business-to-business partnerships and explore international sales opportunities.

Mr. Geen stated: "Since day one, Speakeasy's foundation was built on consistency and high quality. We proved that we can provide both through the B2B demand of Speakeasy's craft cannabis product sales. Canada's largest producers are only starting now to figure out the value behind craft cannabis -- they are spending a tonne of money and playing catch-up. The blueprint for our infrastructure has been long laid out and we have proven that it works. Now is the time to scale and continue focusing on the winning formula."

Craft cannabis market and demand

The rise of small-batch production comes after mass producers spent years and billions of dollars cultivating cannabis, the vast majority of which was ultimately unsaleable.

Market research has shown that there is no loyalty toward value brands from consumers. Craft cannabis users, on the other hand, become loyal to brands that are consistent with high quality and availability.

In its latest annual data report, the Ontario Cannabis Store noted that craft cannabis has successfully emerged in the market, encouraging the rest of the industry to build brands based on fresh products and farm-to-consumer artisanal practices. In addition to maximizing product diversity in OCS's dried flower and preroll assortment, craft cannabis helps to draw legacy consumers to the legal market by offering more products that reflect artisanal legacy production methods.

Canadian licensed producers are now switching their positioning from the amount of biomass they produce to delivering what the consumer wants -- quality. Many licensed producers are now paying as high as $54.4-million to acquire craft cannabis brands, while one licensed producer has 13 craft cannabis partners.

Greenhouse cannabis versus craft cannabis pricing:

• Indoor craft cannabis -- high at $12.85 and low at $7.14;
• Greenhouse cannabis -- high at $7.13 and low at $4.85.

About Speakeasy Cannabis Club Ltd.

Speakeasy Cannabis Club holds a cultivation, processing and sales licence issued by Health Canada under the Cannabis Act.

Speakeasy owns 290 acres of land in Rock Creek, B.C., and leverages five generations of farming experience in British Columbia as well as its favourable location to grow and process high-quality cannabis products at low cost. Speakeasy cultivates small-batch, high-quality craft cannabis at scale in a portion of its 63,200-square-foot indoor cannabis complex and has completed its harvest of its 60-acre outdoor field.

We seek Safe Harbor.